There is a Hausa proverb that says, ‘a good Friday market is noticed from its activities on Wednesday’. Like the proverb, there is a sign that the administrators of the Tinubu government are not working to revive the Nigerian economy. I say this because they have chosen to work on the self-harming policies. The same policies Tinubu called poisonous holy communion during the Presidential campaign.
These administrators are doing so by hastily adopting the neoliberal policies of Washington; partly because they have no clear plans, and partly because they enjoy the trial-and-error approach. They have now bought the idea of pursuing higher income generation and private sector participation. These economic policies advocate for limited government intervention. On the contrary, for Nigeria to grow, more investments in social welfare and government interventions are needed.
To digress a bit, those Bretton Wood institutions experts cannot proffer such harmful policies to their home countries. We currently have a Senegalese, Ndiame Diop, who replaced the Indian-born Shubham Chaudhuri. Surprising how none of their countries practice what they preach in Nigeria. For the record, the CFA franc (XOF), used in Senegal, is pegged to the Euro and still pays fuel subsidies.
But they support Tinubunomics – floating the Naira and its continuous devaluation, increasing prices of petroleum products and removal of subsidies across the sectors. The World Bank recommends increasing the VAT rate from 7.5 percent to boost non-oil revenue. These are the same policies subsequent governments refused to fully adopt. If their plans were for the welfare of the country, they would have realised that these policies could not generate growth.
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The problem is that it is not only the Nigerian people, investors and households alike, that are feeling the pain of these austerity policies. A large number of Western corporations have also been retreating from Nigeria due to the effects of these harmful policies. You would think these Lagos boys would know what they are doing. These are policies that harm the potential of achieving their coveted trillion-dollar economy.
But after listening to their justifications, it is clear what the priorities are – it is not to grow the economy. They have done so much harm that it is difficult to fully revert to full fuel subsidy in the short term. This is because they have created a currency crisis by unifying the exchange rate. The printing of money to finance their deficits is compounding the issue.
Another confusion is how they rely on predictions from people in Washington, people who have limited knowledge of our system. For example, a 2023 World Bank publication titled ‘Seizing the Opportunity’ predicted Nigeria’s inflation will rise in 2023. They predicted it will be lower in 2024 and 2025 if the right policy mix is sustained.
At the moment, annual inflation has climbed to a high of 34 per cent in May 2024 on the back of soaring food prices and high energy costs. On a lighter note, this is what Tinubu affirmed during his campaign: to continue the policy of the past government. So, they have kept their campaign promise of maintaining double-digit inflation since 2016.
And like a bad workman who always blames his tools instead of taking responsibility, they are never short of explanations for failures. They tried to blame the past administration for printing N30 trillion to finance deficits, but new information shows it is misleading. I hope the Bretton Wood Institutions will also revise their reports after these revelations. As it stands, everyone knows who to blame—the administrators of the Tinubu government.
Instead of taking responsibility, they have come back to shift the goalpost by considering additional loans. And they have no choice but to accept the conditions set by the Washington lenders. The recent $2.25 billion World Bank loan includes introducing new taxes and other duplicated projects that already exist. They will do everything to ensure the Senate rubber-stamps it.
I believe a rational administration that is interested in generating growth and improving the lives of the people will not rush to adopt these policies blindly. In their first year, I imagined they were going to target some low-hanging fruits to change the economic conditions.
They could have targeted to raise the oil production to two million barrels per day. They could have focused on flaring gas and channelled it to supply the needed electricity, and should have focused on reviving the refineries. From their convictions, it does not seem they want to do so. They prefer to blame the past administration instead of taking action.
As a consequence, they have made Nigeria one of the highest rates of inflation in Africa. The high inflation has helped push millions of Nigerians into poverty in the first year of this administration. This adds to the 133 million people who already lack adequate access to food, healthcare and sanitation, in addition to suffering financial hardships.
In short, they have turned people into church rats by choosing to feed them the poisonous holy communion of the Bretton Wood institution. And it could have all been avoided.
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